Why have the CBO if Congress doesn't heed it's warnings?

The CBO is the Congressional Budget Office. CBO assists the House and Senate Budget Committees, and the Congress more generally, by preparing reports and analyses. In accordance with the CBO's mandate to provide objective and impartial analysis, CBO's reports contain no policy recommendations. (That's direct from the CBO website cbo.gov)

While the 'stimulus' bill, now called the Reinvestment Act of 2009, was still being debated, the CBO released it's analysis that showed that the short term effect (ie next couple of years) the Act would help the economy. BUT in the long term the effects would be worse on the economy than if nothing had been done. Around the year 2016 the Reinvestment and Recovery Act would cause the GDP (gross Domestic Product) to drop. That's never a really good thing. Hum...

Now fast forward to the current debate over Cap and Trade. The idea is admirable and has worked in the past for helping to curb sulphur emmissions that lead to acid rain back in the early 90s. The current proposed use of the idea of setting a "cap" on the amount of carbon emmissions that are allowed into the enviornment. Companies can "trade" their allowances so that large emitors can buy emmission allowances from smaller emitors. Good in theory. However guess who emits carbon? YOU DO!! Everytime you drive your car, use your lawn mower, use your water heater or washer and dryer, basically anytime you use energy. Here is what the Wall Street Journal had to say.

Here is what the CBO had to say: (you can read their whole report here)

"The rise in prices would impose a larger burden, relative to income, on low-income households than on high-income households for two reasons. First, low-income housedholds spend a much lager fraction of their income than do high-income households.
In addition, energy-intensive items compose a greater share of low-income households' total expenditures. Data collected by the Bureau of Labor Statistic
indicates that, measured as a share of income, spending on energy-intensive items by households in the lowest income quintile averages more than five times that by households in the highest income quintile (see Table 1).
Although the price of energy-intensive items such as electricity, natural gas, homes heating fuels, and gasoline would increase the most, the price of most items would rise in response to the imposition of a cap-and-trade program (because energy is an input for almost all goods and services). The price increases (as a percentage of income for items that were not energy-intensive would account for approximately 40 percent of the total price increases for households.
The price increases caused by a ca-and-trade program would impose additional costs on households. For example, without incorporating any benefirs to households from lessening climate chane, CBO estimates that the price increases resulting from a 15 percent cut in CO2 emissions could cost the average househols roughly $1,00 (in 2006 dollars), ranging from nearly $700 in additional cost for the average household in the lowest one-fifth (quintile) off all households arrayed by income, to about $2,200for the average household in the highest quintile.
The higher prices that woud result from a cap on CO2 emissions would reduce demand for energy and energy-intensive goods and services and thus create losses for some current investors and worskers in the sectors of the economy that supply such products. Investors might see the value of their stocks decline, and workers could face higher risk of unemployment as jobs in those secotrs were cut. Stock losses would tend to be widely dispersed amount investors because sherholders typically diversigy their porrfolios. In contrast, the costs of unemployment would probably be concentrated amount relativesly few households and, by extension, their communtities.
The magnitude of those transitional costs would depend on the pace of emission reductions, with more rapid reductions leading to larger transitional costs."
How much are you going to have to pay?
Didn't Obama say no taxes on 95% of American working families? This looks like a tax to me.

Pay raise for Congress

Dispite the fact that hundreds of thousands of jobs are being lost every month, and dispite the millions of foreclosures and pending foreclosures, dispite the caps they themselves are imposing on the salaries of others, dispites the doom and gloom outlook that the President is exuding to the American (and international) public, Congress voted to allow the automatic annual 2.8% pay increase to remain in the $410 BILLION omnibus spending bill. They could have chosen to not take the increase. But do you think they would do that? NO WAY!!!!! Well some voted against the raise.

What does that mean? Let's do the math.

Congressional members made $169,300 as of January 1, 2008.
The automatic pay raise of 2.8% for 2009 would mean a $4740.40 increase bringing the total to $174,040.40.
Now multiply that by the number of congress members. According to Wikipedia there are 535 members of congress. So 535 x 4740.40 = $2,536,114 additional funds needed to pay congress. The total bill just for salaries is then $93,111,614.
So the $2.5 million doesn't seem that big when comparing that to the $410 BILLION of the spending bill but that is the mentality that gets us to the point where we are in debt so badly. A million here, a couple million there ADD UP.

Do you get a 2.8% AUTOMATIC payraise this year? Would your company just fork over the money if all your coworkers voted to raise their own pay? Didn't think so. The real world doesn't work like that.

Oh yeah, and how much does the average American make? In 2007, the median annual household income rose 1.3% to $50,233.00 according to the Census Bureau. So your congress members alone make more than 3 times the national HOUSEHOLD average.

New York City

So going along with the theme from the last post, there is a statistic being circulated that I think would make most people's jaw drop. In New York City, where between 8 and 9 MILLION people live, over half of the city income tax is paid by guess who many people?
4 million people? not even close
3 million people? nope
2 million people? still wrong
1 million people? too many zeros
500,000 people? still too many zeros
50,000 people? almost there

41,290 people pay one HALF of the taxes collected in a city of over 8 MILLION people!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

If that is not sckewed than what is? Now imagine you are one of those almost 42,000 people how would you feel. They pay NY city income tax, NassauSoffolk County income tax, NY state income tax, and the Federal income tax. And the people that benefit from the money THEY EARNED are being told to hate those rich selfish people and they ARE!!!

If you owned a business and you had a couple of loyal customers who accounted for about half of your sales and income, how would you treat them? Would you wine 'em and dine 'em (or root beer 'em and in-n-out 'em) or would you turn your other customers against them and get those customers demanding that those few customers pay the bills for ALL the customers?

Come on people!! We can't keep demanding more from those who make more than others. Who else can afford to continue to spend money during these tough times? By them going to the mall and buying new clothes and buying new cars and boats and going on vacations they are STIMULATING the economy and helping to keep people employed. Imagine if they stopped spending money, how many more businesses would go under? Now think about that. The more we tax them and take the money THEY EARNED from them the more that is taken out of economy. Remember what happened with the luxury tax? A number of years ago a tax was put on new luxury items, ie cars over a certain amount and boats and furs etc, well the people with money stopped buying new items and started to buy used items. Why? No luxary tax. You may say, so what, they still got a $100,000 yacht. They did, but what happened to the people who were in the boat making industry that was then not selling new boats? They lost their jobs. And the luxury car industry? Same story. Fine jewelery? Same story.

You may say that was then and this is now. Well modern example oof what happens when the government interfers with how those with a little money spend it. You know I'm sure that congress has imposed strict "guidelines" on how big businesses spend their money. No more incentive trips and no more retreats etc. You may say good, they shouldn't be spending their money on that. Think about where that money was going to go and how it would have been used.
Company says "Sell lots and we'll send you to Vegas"
Employees sell more products and earn trip
Company sends them to vegas
money is spent on airfare, hotel, food, transportation
airlines, hotels, restaurants, rent-a-car places receive money
they pay their employees
So think about it when a majority of those trips stop
the money stops flowing in and the businesses lose that income and don't make as
much and can't afford to keep their employees and, oh no, lay off people.

IT'S HAPPENING!! Vegas has come out and said that it's losing MILLIONS of dollars because of the lack of corporate trips. Less money = less jobs.

Why don't people follow the money trail and see that it may start in some fat cat's pocket book but it ends up helping to put the food on their table.

Sticking it to the rich

There are many politicans claiming that the rich don't pay their fair share of taxes. The same politicians then say that the government needs to step in and make the rich pay more.

I have a question about the idea of the rich not paying their fair share of taxes? What is it based on? I wondered for quite awhile, how true is this? Is there any information that shows the amount of taxes paid by the "rich" versus the amount of taxes paid by the "poor"?

I found information that refutes the claim being made by many politicians today. If you look at the bottom portion of the image, the chart compares the percent of total income earned in the country by various groups to the percent of the total federal taxes paid by those same groups. Let's look closely.

1. The top 0.1% make 9.1% of all the income in the country but pay 17.4% of all the federal taxes paid in the country.

2. The top 1% make 19% of all income but pay 36.9% of all federal taxes.

3. The top 5% make 33.4% of all income but pay 57.1% of all federal taxes.

4. The bottom 50% make 13.4% of all income but pay only 3.3% of all federal taxes.

5. The wealthiest 5% pay almost 60% of the taxes. While the poorest 50% pay less then 5%. How does that equal the rich don't pay their share of the taxes?? You tell me.


Look at the source... The Department of the Treasury, based on IRS data from the 2004 tax year. Not a political party or someone trying to win an election.

Crazy California Controller

So I work at a tax office. You want to know what I learned today? California taxpayers who submit their taxes after tomorrow will have their return processed and their refund, if any, sent out BEFORE those who sent in and had their returns accepted prior to today. Yup. So if you have already submitted your return and haven't gotten your refund yet you will probably have to wait till those that come in from now on get processed and those refunds are sent out!!

HOW LUDICROUS!!!

The explanation is that there is a back log of returns and so the state will hold those they already have and start processing those yet to come. Hello Controller. That is NUTS.

The solution? The FAIR solution? If there is a back log you pick a date and say everything that you receiver AFTER this date you will hold, in order, and process them AFTER you finish what we have NOW. Then you repeat that procedure if you find ourselves backlogged again.

Who voted for the controller? Oh get this. After declaring that the state would send out IOUs for jury service and tax refunds and saying how the state is in a financial mess he went out and spent over $900,000 on new office furniture. Yup. Real financially responsible this man is, and he's in charge of our money.

I didn't vote for him.